Nvidia Says GPU Sales for Crypto Mining Have Dried Up

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If you had tried to buy a new video card a year ago, you would have been in for a very, very bad time. The explosion of interest in cryptocurrency pushed prices sky-high, leaving almost no cards for people who just wanted to play some games. Prices have mostly returned to normal in the last few months, and now Nvidia has confirmed what we all suspected in its recent earnings call. GPU sales for cryptocurrency mining are dropping like a rock.

The process of mining cryptocurrency involves running increasingly complicated calculations to generate new coins. This process also serves to process transactions and update the blockchain, a sort of master leger for a currency. In the early days of a currency, a CPU is powerful enough to churn out virtual coins, but GPUs become necessary as a currency matures. Eventually, even multi-GPU mining rigs are insufficient. In the case of Bitcoin, mining on personal hardware become unprofitable ages ago. Now, the only way to turn a profit on Bitcoin is with large numbers of ASIC (application specific integrated circuit) systems.

The price boom of 2017 through early 2018 brought a lot of new miners into the market, and they all needed hardware to generate new coins. Thus, the law of supply and demand took over to wreck GPU prices. You were lucky to see cards selling for less than double MSRP. Now, Nvidia says revenue from selling to crypto miners has dropped substantially to just $ 18 million. In the first quarter of the year, Nvidia reported $ 289 million in revenue from “crypto-specific GPUs.”

“Look at these amazing prices,” said no one, ever.

The company doesn’t foresee another major uptick in mining, either. It projects sales to cryptocurrency miners will remain “negligible” going forward. Nvidia has adjusted its plans to compensate for that, too. It expected crypto would remain a large part of its sales before the bottom dropped out of the market. It had projected about $ 100 million in crypto-related revenue for the quarter.

Nvidia CEO Jensen Huang noted during the Nvidia earnings call that it first spotted the uptick in GPU sales in the third quarter of 2017. That’s when Bitcoin prices were solidly over $ 10,000, dragging newer cryptocurrencies along with it. Bitcoin peaked at over $ 20,000 before dropping back down — it’s currently worth a little over $ 6,000.

If you’re not looking to mine some fancy new virtual coin, this is good news. GPU prices are likely to stick at or below MSRP for gamers.